Financial accounting

Financial accounting differs from managerial accounting because the information and analyses are for people outside the organization. This information goes to owners and prospective owners, creditors and lenders, employee unions, customers, suppliers, governmental units, and the general public. These external users are interested in the organization’s profits, its ability to pay its bills, and other financial information. Much of the information is contained in the annual report, a yearly statement of the financial condition and progress of the organization. Various quarterly reports keep the users more current. Financial accounting reports answer such questions as the following:

• Has the company’s income been satisfactory? Should we invest in this company?

• Should we loan money to this company? Will it be able to pay the money back?

• Can the company afford to raise its salaries? Is it financially strong enough to provide permanent employment?

• Is the company financially strong enough to stay in business to honor product warranties?

We hope you are getting the idea that accounting is critical to business and to anyone who wants to understand business. If so, you may want to know more about accounting firms, who the people are, who prepares these reports, and how you can be sure that they know what they are doing. You may even become interested in an accounting career. Traditionally, such careers have been paid well and usually only good students apply for such vacancies.

My speciality (Finance and Credit)

I am a student of Chernivtsi Trade and Economics Institute. Our institute trains experts in many specialities: trade economics, accounting and auditing, finance and crediting, management and marketing, international economics, economic cybernetics. I study at Finance and Economics Faculty majoring in finance and credit. The aim of Ukrainian trade is to fully satisfy the requirements of the population. It is important tools of raising people’s living standards. To comply with the demand of the time, we, the students of Chernivtsi Trade and Economics Institute must do our best to master our speciality. Our trading establishments begin working on cost-accounting and self-financing principles.

Our future speciality is finance and credit. We shall work in different financial institutions such as treasury, banks, tax inspection, which execute state politics with regards to monetary circulation, credit and currency transactions. They coordinate the activities of the banking system and exercise control over the activities of the business structures. Finance is the function in a business that is responsible for obtaining funds, managing funds within it and controlling them.

Financial manager performs many functions, such as planning, budgeting, obtaining funds, controlling funds, collecting funds (credit management), auditing, managing taxes, advising top management on financial matters. You must be sure, that without a carefully calculated financial plan, the firm has little chance for survival. In virtually all organizations, funds are required to finance specific operational needs. A firm has four basic financing needs:

1. Financing daily operations.

2. Managing accounts receivable.

3. Financing the purchase of inventory.

4. Financing the purchase of major assets.

Financial position of a firm is reflected by its credit policy. And a carefully constructed inventory policy assists in maximizing profitability. So I must study hard to become a good specialist. I've chosen this speciality because it is a very prospective one. I'll do my best to become a good expert in finance and credit.